HGA Group | Report on the World Retail Congress – Dubai 2016
15706
single,single-post,postid-15706,single-format-standard,ajax_fade,page_not_loaded,,qode-title-hidden,qode-child-theme-ver-1.0.0,qode-theme-ver-9.0,wpb-js-composer js-comp-ver-4.11.1,vc_responsive
Screen Shot 2016-05-25 at 10.19.16

25 May Report on the World Retail Congress – Dubai 2016

Having attended the World Retail Congress, hosted in Dubai this April, the mood amongst retailers was both ponderous but also optimistic as to how to take advantage of the “new world” that we find ourselves in.

The challenges of modern day retailing have been well documented and include all sorts of ailments…

Internationally, many new areas of the world that were expanding in terms of retail opportunity are now experiencing challenges:

  • There are many retailers in The Middle East who are experiencing lfl decreases of between 20% – 30% as the low oil price limits spend and as Chinese and Russian footfall has decreased given their domestic slowdowns.
  • China’s economy grew 6.9% in 2015, which was the slowest growth since 2009.
  • Brazil faces a continuous recession in 2016 and decline in investment.
  • Russia’s recovery is very much linked to the price of oil.
  • India is still not considered by many retailers to be an easy territory to manage given the restrictions around Direct Foreign Investment.

We also are finding other longer term changes, e.g.,

In the US, less driving is taking place:

  • Ageing population
  • Millennials prefer urban living
  • Shopping and working online

Implications:

  • Less demand for energy
  • Less tax revenue
  • Less time in traffic
  • Less need for commercial property

In the UK, we have many challenges as online shopping expands and physical store business decreased as well as medium term challenges including:

  • Rising saving means purchasing is growing slower than income
  • Aversion to debt
  • Shift in lifestyles. Young adults increasingly renting, buying fewer things, engaging in more experiences
  • Online shopping is boosting market share
  • 2015 digital spend was £60 billion which represents 15% of retail sales
  • Digital spend is predicted to hit £86 billion by 2019
  • Bricks and mortar sales fell by almost 3% in 2015, digital spend lifted by over 15%.

So a sprinkling of some of the discussions / though processes, that I participated in at the WRC included:

The number of physical stores will of course decrease in Europe and the US, those that will remain will be those in the best locations (either from a prestigious / footfall perspective or alternatively, perhaps in a secondary / tertiary location that has been traditionally shunned by retailers. The overriding belief very much was that customer service needs to be invested in, so that standards lift dramatically and that the art of “theatre and magic” needs to be introduced into stores so that the experience within a bricks and mortar environment is compelling.

Given that the line between work and leisure is blurred, property developers are looking beyond the traditional “big is best” in terms of shopping centre expansion. There are a number of shopping centre developers now in the Gulf region who are building shopping centres that combine retail alongside residential, sports and outdoor facilities.

BS Nagesh, Vice Chairman and NED of Shoppers Stop in India, (inducted into the Retail Hall of Fame at the World Retail Congress in 2008) spoke eloquently as to the introduction of “Shadow Boards” within retail organisations. These Boards comprise of individuals, none of whom are over a certain age – quite often 25 years old, who work closely with the main Board members to advise as to how millennials live and shop and to develop, prioritise and implement systems and processes that will ensure their organisations are ready for 21st Century retailing.

Antonia Jermendy, Head of Innovation & Test at Swarovski, discussed as to how her organisation has compiled a cross functional team who discuss, debate and prioritise digital initiatives, that are also financially costed in terms of costs and benefits. There is an agreement as to priority implementation. So, Swarovski have launched an augmented reality app which allows the shopper to “try on” various pieces of jewellery and then download onto social media sites, this of course aids conversion figures and ultimately sales.

A number of “Silicon Valley” operators were present, who discussed the current themes of personalisation and relevance of digital initiatives in a world that is “full of noise”.

Finally Jo Malone, who was inducted into the Hall of Fame gave a moving and rousing speech outlining her launch of Jo Malone, which she sold to Estee Lauder, surviving a very aggressive form of cancer and then launching her current brand, Jo Loves. Her passion for product and her art was extraordinary and her courage fearless!

The above factors all need to be displayed as retailers decide on the initiatives they need to take and the prioritising of these initiatives. Welcome to the new world!

HGA Group and the implications for talent

HGA Group are a boutique Recruitment Consultancy specialising in the fashion and retail sectors. Based in London, we have offices in Dubai, Turkey, South Africa and Italy. Almost 70% of our revenue is driven from international markets.

We recruit in the more established markets of UK, Europe and USA, but also in emerging territories. In April 2016, we secured an E commerce Director for a fashion organisation based in Indonesia, which has a population of 255 million and we are currently looking to secure a Chief Merchandise Officer for a Turkish fashion retailer which has a turnover of $2 billion.

Above all, it is evident that both clients and candidates need to be well informed, robustly net worked and open to the initiatives found within the new world.

Harveen Gill, Joint MD, HGA Group. May 2016